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Maruti Suzuki Ltd: Finishes Year on a Strong Note. What Next? - Views on News from Equitymaster
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  • Jun 13, 2017 - Maruti Suzuki Ltd: Finishes Year on a Strong Note. What Next?

Maruti Suzuki Ltd: Finishes Year on a Strong Note. What Next?
Jun 13, 2017

Maruti Suzuki Ltd has announced its financial results for the fourth quarter and the financial year 2016-17 (4QFY17). During the quarter, revenues grew by 20.4% YoY and net profits grew by 15.3%.

Performance summary
  • For 4QFY17, net sales grew by 20.4% YoY. The growth in the revenue was a function of both robust volume growth (up 15% YoY) and growth in the realisations (up 4.7% YoY) due to superior product mix.
  • The growth in realization has been on the back of robust product mix and price hikes. The company also refrained from aggressive discounting. Further, Vitara Brezza, Baleno, and Ciaz retained leadership positions in their respective markets.
  • However, the Operating profits for the quarter grew at a slower pace at 8.9% due to increase in the raw material prices (up 26.8% YoY). The rebound in the commodity prices led to increase in the raw material prices.
  • Net profits grew more than operating profits at 15.3% YoY with margins at 7%. The increase in the net profit was due to benign depreciation charges.
  • For FY17, the topline grew by 18.8% YoY with net profits growing by 36.7% YoY. The company declared a dividend of Rs 75 per share.

    Standalone Financial Performance Snapshot
    (Rs m) 4QFY16 4QFY17 Change FY16 FY17 Change
    No. of Vehicles sold 360,381 414,439 15.0% 1,428,600 1,568,603 9.8%
    Net sales 169,584 204,230 20.4% 651,055 773,164 18.8%
    Expenditure 149,082 181,905 22% 562,168 669,583 19%
    Operating profit (EBDITA) 20,502 22,325 8.9% 88,887 103,581 16.5%
    EBDITA margin (%) 12% 11%   14% 13%  
    Other income 5,384 4,449 -17.4% 14,806 22,896 54.6%
    Depreciation 7,599 7,010 -7.8% 28,218 26,039 -7.7%
    Interest 203 226 11.3% 817 894 9.4%
    Profit before tax 18,084 19,538 8.0% 74,658 99,544 33.3%
    Tax 6,113 5,730 -6.3% 20,875 26,162 25.3%
    Profit after tax / (loss) 11,971 13,808 15.3% 53,783 73,382 36.4%
    Net profit margin (%) 7% 7%   8% 9%  
    No. of shares (m)         302.1  
    Diluted earnings per share (Rs)*         242.9  
    Price to earnings ratio (x)*         30.61  

    *trailing twelve-month earnings

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